LLP Vs Pvt Ltd Company.

1. - A Distinct Comparison
- By Sahana.G and Co.,
Ph No: 099642-18244

2. LLP
 Obtain DSC
 Obtain DIN/DPIN
 Obtain Name Approval
from MCA
 Filing documents such as
MOA , AOA for
incorporation
 Obtaining the
incorporation certificate
 Obtain DSC
 Obtain DIN
 Obtain Name Approval
from MCA
 Filing documents such as
MOA , AOA for
incorporation
 Obtaining the
incorporation certificate
Pvt Ltd Co

3. LLP
 Incorporation Fees and
stamp duty payable to
MCA will be approx
8,000/- ( For Capital
infusion of 1 Lakh )
 Stamp duty varies
depending on the amount
of capital contribution
 No Minimum Capital
contribution limit
 Incorporation Fees and
stamp duty payable to
MCA will be approx
12,000/- ( For Capital
infusion of 1 Lakh )
 MCA fee varies depending
on the amount of capital
contribution
 Minimum capital required
here is 1,00,000/-
Pvt Ltd Co

4. LLP
 Separate Legal Entity
 No clear distinction between
owners and management
 Partners can be owners as
well as managers
 No Maximum Limit for
number of partners
 Less flexibility when it comes
to transferring or sharing of
ownership as approval from
all the existing partners is
required
 Separate Legal Entity
 Clear distinction between
owners and management
 Shareholders /Owners do
not necessarily have to
have management powers.
 Maximum number of
shareholders shall be 200
 More flexibility when it
comes to transferring or
sharing of ownership
Pvt Ltd Co

5. LLP
 Tax Compliances are
similar
 Statutory Audit is not
compulsory until LLP
reaches the turnover of 40
Lacs and Capital of 25 lacs
 Penalty for non filing of
annual returns with MCA
is higher compared to a
Company. Rs.100 flat fee is
levied per day from the
date of non-compliance
 Tax Compliances are
similar
 Statutory Audit is
compulsory from date of
inception itself
 Penalty for non filing of
annual returns with
MCA is lesser compared
to a LLP. It depends on
the Authorized Capital
Pvt Ltd Co

6. LLP
 Only Approval route of
FDI ( Prior approval of
RBI ) is permissible.
 Relatively new concept.
Rules , regulations and
procedures are yet to
evolve
 Both automatic ( Prior
Approval not required )
and approval routes of
FDI is allowed. Better
access of funding from
banks also
 Widespread recognition
in India. Well
established procedures
Pvt Ltd Co

7.  Registration Process is similar
 Tax rates and compliances( MAT in case of company and AMT in case of LLP )
are similar
 Statutory Audit is not compulsory for LLP
 FDI under automatic route is not permissible in LLP.
 Venture capital funding and ESOPs also not allowed in LLP
 Conversion procedures from LLP to Pvt Ltd Co is still in its infancy. Yet to
evolve.
 In LLP there is no concept of dividend distribution tax. Whereas, for a Private
Limited Company, dividends are taxed at 16% when it is declared to
shareholders
 In LLP, there is no concept of Board Meetings or Annual General Meetings.
 Transfer of Ownership requires permission of all partners in LLP whereas
shareholders do not require any permission

8. If a person has expansion plans in future and expecting
funding in future through FDI, FII, Venture Capital, ESOP
etc., it is better to opt for a Private Limited company with
a slightly higher cost and dividend tax ( Again cost
depends on the Authorized capital of the company ).

9. By Sahana.G and Co,
Chartered Accountants
Firm Reg No : 015931S